New York Life Selling Mostly Vacant Suburban Chicago Office

After hanging on through recovery from the Great Financial Crisis and at least partway through the post-pandemic market, New York Life is ready to face the music in Schaumburg.

The insurance giant has officially hit the market with the Woodfield Corporate Center, a two-building, 711,000-square-foot suburban Chicago office complex that has sat on its balance sheet for nearly two decades. The move signals a major capitulation by one of the market’s most patient institutional players, putting an end in sight to a difficult era for property.

For New York Life, the exit has been seventeen years in the making. The firm’s involvement dates back to the 2007 market peak, when it provided a $70 million loan for the 12-acre campus at 425 and 475 North Martingale Road. That bet soured as the subprime mortgage crisis ballooned and shook the entire financial system when it popped.

In 2011, the lender officially took the keys from a joint venture of General Electric’s investment arm and Lincoln Property Company via foreclosure.

Since, the asset has been held as real estate-owned by New York Life. While the firm saw some leasing success in the years following the takeover, reaching over 80 percent occupied at some points, the post-pandemic office environment has made the long-term hold increasingly difficult to justify.

The offering is being led by a Colliers team consisting of the recently recruited Dan Deuter, formerly of Cushman & Wakefield; as well as Thomas Denison, Valerie Cook and Lizzie Apgar. A CBRE team handles Woodfield Corporate Center’s leasing, while Lincoln Property Company is assigned to property management, while a Colliers debt and structured finance team of Ben Greazel, Joel Simmons and Adam Levinson are on the investment sale listing, too.

New York Life didn’t return a request for comment and the listing team declined comment.

The insurer is likely in a position to rid the asset off its balance sheet and absorb a loss. While there’s no asking price on the listing, the seller likely could have generated a much larger offer, maybe well beyond than the original $70 million loan amount, in the years leading up to the pandemic, but New York Life opted to hang on.

Holding turned out to be the wrong move, as the suburban office market is facing a brutal post-pandemic reckoning. Institutional owners are increasingly being shaken out by the combination of high interest rates and cratering demand for traditional suburban campuses. Office vacancy was at a record high of nearly 33 percent in the Chicago suburbs as of last quarter.

And foreclosures abound, setting up more potential opportunities for discounted offices in the northwest suburbs.

For instance, Zack Markwell, the CEO of Atlanta-based real estate firm Stonemont Financial Group, owns a large portfolio of commercial real estate in the Chicago area encompassing a handful of major office properties, including the two-building former Motorola campus in Schaumburg, that were pulled into a $664M foreclosure lawsuit last year to settle the unpaid balance of a nearly $1 billion loan issued right before the pandemic.

Such opportunities in Chicago’s suburbs are providing buyers such as Alfred Teo — who bought the Schaumburg Towers property in 2024 out of an $84 million foreclosure lawsuit — chances to reset the values of troubled office properties by buying cheap and investing in upgrades to help them stand out to tenants in the hybrid work era of limited demand for commercial real estate.

Editor’s note: This article was updated to correct the firms handling leasing and property management at Woodfield Corporate Center.